Examples of Poor Earnings Quality That Hinder the Forecasting of Expected

question 69

Multiple Choice

Examples of poor earnings quality that hinder the forecasting of expected future earnings include all of the following except:

• A) Earnings dominated by a substantial one-time gain from the sale of real estate tangential to the firm's operations.
• B) Reporting a large expense from a warehouse fire that was not covered by insurance.
• C) A local government corrects a processing error and a firm receives an unexpected rebate on property taxes previously paid.
• D) The company adds equipment that reduces carbon emissions in response to EPA requirements and increases production efficiency.

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Definitions:

Process Reengineering

The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed.

Customer Satisfaction

The degree to which a product or service meets or exceeds the customer's expectations.

Customer Needs

The requirements or desires of consumers that companies aim to meet with their products or services.

Process Reengineering

The radical redesign of core business processes to achieve dramatic improvements in productivity, efficiency, and quality.